In his state of the state address, Texas Gov. Greg Abbott gave a boost to the insurance industry’s effort to get legislation passed that would place limits on post-hailstorm litigation.
Calling lawsuits against insurers following hailstorms “the newest form of lawsuit abuse,” Abbott said in his Jan. 31 speech that he would like to see on his desk legislation “that limits abusive hailstorm litigation.”
Abbott said past tort reforms in the state are one of the reason why Texas is an attractive place for business. But, he said, “our work is not done” without hailstorm litigation reform.
Property insurers would like to see laws enacted to discourage public adjuster and attorney involvement in the claims process. They say increased involvement is causing significantly higher claim costs and will lead to higher insurance prices and fewer options statewide.
Consumer advocates, however, caution against placing restrictions that would deny policyholders the right to hold insurers accountable for errors or perceived injustices in claims handling.
“Hailstorm reform litigation is by far the number one piece of legislation that the insurance industry in Texas is supporting. We warmly welcome Texas Governor Greg Abbott’s call in his state of the state speech to put a halt to this storm-chasing lawsuit abuse,” said Mark Hanna, manager of public relations and membership for the Insurance Texas Council of Texas, which represents property/casualty insurers in the state.
Joe Woods, vice president of state government relations in Texas for the Property/Casualty Insurers Association of America (PCIAA), said the national insurance trade group also welcomed the governor’s comments.
“The trial bar’s strategy seems to be to deny that there’s a litigation crisis going on at all, that it seems to be a problem in isolated areas of the state. We don’t think the data backs that up. Every time there’s a storm now we expect there will be a large number of lawsuits following. So we were glad to see the governor give some emphasis to the efforts this session to reform this lawsuit abuse,” Woods said.
Not everyone believes the issue is as urgent as property insurers claim.
At a Dec. 1, 2016, hearing held by the insurance committee of the Texas House of Representatives, Joe Matetich, with the Office of Public Insurance Counsel (OPIC), told lawmakers that preliminary data from research conducted by the Texas Department of Insurance at the request of state lawmakers shows that “statewide hail litigation crisis does not currently exist in Texas,” and that there “does not appear to be an insurance market problem” in the state.
Ware Wendell, with Texas Watch, also testified that there already are “laws on the books that protect insurance companies, agencies, adjusters. … Many came from tort reform of 1995.” He said his organization is concerned that if the insurance industry succeeds in limiting access of insurance consumers to the courts when it comes to claims, that the balance will be tipped “further in favor of the insurance companies.”
A bill introduced during the 2015 legislative session that insurance industry said would help limit litigation related to property insurance claims died in the House.
Passed the Senate on April 30, 2015, Senate Bill 1628 by Sen. Larry Taylor of Friendswood would have, among other things, limited the time frame in which property damage claims and lawsuits over those claims could be filed.
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- Attorneys, Insurers Facing Off over Hail Litigation in Texas
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